Wholesale Drive to Deregulate is Unfounded, says CIPD

A new CIPD report entitled The economic rights and wrongs of employment regulation, (PDF) has questioned “the wholesale drive to deregulate” advocated by many business groups. The report highlighted that the UK still has the third least regulated labour market in the world according to the OECD.

In addition, it stated that the rising numbers of employment tribunal claims were caused by an increase in multiple claims (where many employees are claiming in relation to what is in effect a single dispute with one employer) and the impact of the recession, which has seem more employees claiming unfair dismissal as businesses downsized.

The report concluded that the focus of regulatory reform should be on streamlining the red tape that accompanies regulation, rather than on watering substance of existing employee rights.

“It’s time UK business stopped seeing red whenever employment regulation is mentioned and instead adopted a more balanced, evidence-based perspective.”

said CIPD chief economic adviser, Dr John Philpott.

The Institute of Directors’ director general, Miles Templeman, said people should take the CIPD’s arguments with a big pinch of salt.

“The HR lobby is the biggest vested interest of all when it comes to the subject of employment law,” he said.

“When governments create complex regulation, employers are forced to increase their HR budgets to ensure compliance,” he added. “The fact that excessive employment regulation imposes large costs on employers and inhibits their ability to grow seems to be a matter of indifference to the HR lobby.”

The Government announced in the Budget it was removing £350 million worth of regulation as well as introducing a three-year exemption from all new domestic regulation for firms with fewer than ten employees.

Employment relations minister, Edward Davey, said:

“The areas we are reviewing are priorities for employers. Fairness for individuals will not be compromised, but where we can make legislation easier to understand, improve efficiency and reduce unnecessary bureaucracy we will.”

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